GST on petroleum services; government clears the air: Here’s all you need to know
The government today clarified some recommendations that the GST Council made last week at its 22nd meeting to incentivise investments in the oil and gas exploration and production sector, and to reduce cascading of taxes.
The government today clarified some recommendations that the GST Council made last week at its 22nd meeting to incentivise investments in the oil and gas exploration and production sector, and to reduce cascading of taxes. Interestingly, while petroleum, crude oil, diesel and natural gas are the only commodities to be kept out of the ambit of GST, petroleum related services are under the new tax regime. Here’s all you need to know about the clarification brought out by the CBEC (Central Board of Excise and Customs).
CBEC has clarified that natural gas transportation via pipeline will be taxed at 5% under GST without input tax credit, while at 12% with full input tax credit. Further, CBEC said GST on bunker fuel for foreign-going and coastal vessels has been cut to 5%. CBEC also said that import of rigs and ancillary goods under lease have been recommended to be exempt from IGST. The council, headed by Finance Minister Arun Jaitley, also recommended 12% tax for oil & gas offshore works contract services beyond 12 nautical miles.
The third GST Council meeting since the implementation of Goods and Services Tax in India brought a spate of good news for exporters and small businesses, but also had something to offer to consumers as well, as the government reviewed the rate of tax under GST on as many as 27 goods and services, mostly lowering the tax on these items of common use.
However, the number of items discussed for a review of rates in last Friday’s meeting in New Delhi was far lower than the 60 items under review, on which the government was expected to cut taxes. The GST Council, in its last meeting on September 9 in Hyderabad, had lowered tax on as many as 40 daily use items of the 100 items identified. The council had then lowered the GST rates for a number of daily-use products ranging from idli/dosa batter to kitchen gas lighter.
In its latest meeting, the council chose to focus on straightening out administrative and procedural difficulties in implementation of GST, which have brought the businesses of exporters and SMEs to near grinding halt, and make the reform smoother and simpler.
Source by financialexpress..